Today’s dividend: MDC

I like the company quite a bit … good dividend, good value. I bought my first share for $28.73 last February and added another for $33.79 last month. The two shares make up 0.36% of my portfolio.

MDC

For those of you unfamiliar with MDC, the company builds custom homes, mostly of the single-family detached variety, and offers financial services to help customers finance them. It’s nice because parking some cash with MDC is kind of like investing in two industries at once: construction and finance. I don’t know how many customers go with the company’s financing – I’m sure they aren’t obligated to – but I’d bet a fair amount go with it out of sheer simplicity. I’d imagine it would just be easier as the company building your home already has a foot in the door so to speak.

I liked MDC for the main homebuilding portion of the business when I initially invested in the company, but I’m becoming increasingly intrigued by the lending side of things. I wonder if the projected rise in interest rates will help raise revenue? That would be nice.

MDC looks to be a good value at the moment, currently coupling a P/E ratio of 12.19 and a Price/Book ratio of 1.23. It’s managed to beat earnings estimates each of the last five quarters and the dividend is growing quite nicely. With a yield already well above 3%, and a payout ratio under 50%, MDC recently boosted its quarterly payment by 20%. I received $0.25 from the company each of the first three quarters I owned it – when I had one share – and $0.60 this time around thanks to the raise and the doubling of my position.